Microsoft Opens Up Agency Biz

<FONT SIZE="+3"><B>Microsoft Opens Up Agency Biz

</B>By Cheryl Rosen

<I>Redmond, Wash. </I>- With neither brick nor mortar, Microsoft last week hung out its shingle as an ARC-accredited travel agency. As of Tuesday, customers are welcome to stop by its new travel headquarters-online of course, at www.expedia.com.

While the travel shopping experience at Expedia is pure Microsoft, travelers actually will be dealing with a much more traditional agency, WorldTravel Partners of Atlanta, once tickets are booked.

For corporate travel managers, the site bears scrutiny for two reasons: as a reminder of the stiff competition agencies face for the loyalty of travelers, and as a preview of Microsoft's corporate-oriented Rome system, which will be rolled out under a two-year exclusive agreement with American Express in early 1997 (BTN, July 29).

"Expedia is a subset of Rome," said Greg Slyngstad, manager of Microsoft's travel products unit, which is developing both products. "It does not have preferred corporate vendors, but it will give you a taste of the Rome booking product."

With Microsoft management building Internet services as its core mission this year, and with travel being the largest non-technical online industry, considerable thought and money has been sunk into the Expedia product-and it shows. <I>USA Today</I> rated it four stars-the highest number possible-as a booking engine, compared to three stars each for Sabre's Travelocity site and the independent Internet Travel Network.

Part of the positive reaction, no doubt, came from two unique features offered by Microsoft as it elbows its way into the online booking field: a Fare Tracker service that sends customers weekly e-mails of the best fares to any three destinations, and a 24-hour help desk. Trained agents at WorldTravel Partners will staff the desk under a private label, and also will handle ticketing and other services.

"When an Expedia customer needs technical support, the call will go to Microsoft. But after they complete a booking, they will get us," said WTP corporate travel and technology president Danny Hood. "We are not only providing 24-hour service, but also e-mail service to customers, and handling ticketing and fulfillment, ticket changes and cancellations, scripting and quality control, and ARC accounting. It's a lot more than we originally thought it would be."

So much more, in fact, that WTP has spun off a new company, WorldTravel Technologies, whose Online Fulfillment Division opened for business with Microsoft as its "flagship customer." Online Fulfillment now has 25 full-time staffers ready to handle Expedia, as well as WTP's ResAssist '96 and "a bunch of other potential customers."

Additional staffers will be pulled from WTP's existing employee base "if the volume goes off the charts," and that might well happen. When Microsoft offered the beta version to the 2 million MSN subscribers, registrations "poured in at a rate faster than one per minute," Slyngstad said. And the list of Amex customers trying to get into the Rome beta test scheduled to begin in January is much longer than Microsoft's ability to accommodate them, he added.

Asked why Microsoft chose WTP to handle the Expedia fulfillment rather than Rome partner American Express, Slyngstad noted that the outsourcing contract was signed about eight months ago, before the Rome contract.

Expedia, which now offers ticketing only in the United States, will expand into Canada by year-end, and into Europe in 1997, said product manager Joshua Herst.